[Federal Register Volume 82, Number 242 (Tuesday, December 19, 2017)]
[Proposed Rules]
[Pages 60126-60128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27067]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 82, No. 242 / Tuesday, December 19, 2017 /
Proposed Rules
[[Page 60126]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 890
RIN 3206-AN54
Federal Employees Health Benefits Program Flexibilities
AGENCY: Office of Personnel Management.
ACTION: Proposed rule.
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SUMMARY: To correct an asymmetry in the insurance market for Federal
employees and annuitants, this proposed regulation provides all Federal
Employees Health Benefits (FEHB) Program carriers the ability to offer
the same number and types of plan options. Currently, OPM regulations
defining minimum standards for health benefits plans allows certain
plans to have two options and a high deductible health plan, while
other plans may have three options of any type or two options and a
high deductible health plan, creating an asymmetry between the
potential offerings of health benefits plans. We are revising the
regulations so all health benefits plans are able to offer three
options or two options and a high deductible health plan. This rule
will give FEHB enrollees more health plan choices allowing them to
select a health plan that best meets their family's health care needs.
DATES: OPM must receive comments on or before February 20, 2018.
ADDRESSES: You may submit comments, identified by docket number and/or
Regulatory Information Number (RIN) and title, by any of the following
methods:
Federal Rulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Michael Kaszysnki, Senior Policy Analyst, Planning
and Policy Analysis, U.S. Office of Personnel Management, Room 4312,
1900 E Street NW, Washington, DC 20415.
All submissions received must include the agency name and docket
number or RIN for this document. The general policy for comments and
other submissions from members of the public is to make these
submissions available for public viewing at http://www.regulations.gov
as they are received without change, including any personal identifiers
or contact information.
FOR FURTHER INFORMATION CONTACT: Michael W. Kaszynski, Senior Policy
Analyst, at [email protected] or (202) 606-0004.
SUPPLEMENTARY INFORMATION:
Authority for This Rulemaking
The Federal Employees Health Benefits (FEHB) Program is
administered by the Office of Personnel Management (OPM) in accordance
with Title 5, Chapter 89 U.S.C. and our implementing regulations (Title
5, Part 890 and Title 48, Chapter 16). The statute establishes the
basic rules for benefits, enrollment, and participation. OPM is
authorized to contract with health insurance carriers; approve health
plans for participation in the program; negotiate with carriers about
benefit and premium levels; determine the times and conditions for an
annual open enrollment period known as ``open season'' during which
eligible individuals may elect coverage or change plans; make
information available to employees concerning plan options; evaluate
health plans on key parameters of clinical quality, customer service,
resource use in comparison with national benchmarks and contract
oversight requirements; apply administrative sanctions to health care
providers that have committed certain violations; and administer the
program's financing.
OPM is also responsible for maintaining the funds that hold
contingency reserves for the plans and the fund that receives premium
payments from enrollees and Federal agencies, from which premiums are
disbursed to participating plans. OPM determines whether retiring
employees or survivor annuitants meet the requirements to continue
health insurance coverage; takes the action necessary to terminate,
accept, or continue enrollment; oversees the automatic deduction of
premiums from monthly annuity checks and credits the premiums, along
with the applicable Government contribution, to the proper account;
processes all enrollment changes; notifies affected carriers of
enrollment changes; and keeps enrolled retirees advised of rate and
benefit changes within their plan.
Background
The Federal Employees Health Benefits (FEHB) Program provides
health insurance to about 8.2 million Federal employees, retirees, and
their dependents each year. It is the largest employer-sponsored health
insurance program in the country providing more than $53 billion in
health care benefits annually. Eligible individuals include Federal
employees, retirees, and their family members. As of May 2012, certain
Indian tribal employers began purchasing coverage for their employees.
Coverage options available to eligible individuals include individual
or family coverage in an approved health benefits plan. Beginning in
calendar year 2016, individuals have a third coverage option: Self plus
one coverage for themselves and one eligible family member.
Generally, available health benefits plans fall into two broad
categories: Fee-for-service (FFS) or health maintenance organizations
(HMOs). FFS plans tend to be available nationwide, and HMOs tend to be
locally available. Based on our March 2017 headcount reports, 16
percent of all contracts are enrolled in HMO plans and 84 percent are
enrolled in FFS plans. Premiums are shared between the Federal
Government and the employee or retiree. Benefits and cost sharing vary
among FEHB plans, but all plans must cover basic services such as
hospital and physician care and may require cost sharing in the form of
deductibles, co-payments, or coinsurance. FEHB financing includes
Government contributions to premiums, policyholder contributions to
premiums, contingency reserves in the U.S. Treasury to offset
unexpected increases in costs, and administrative expenses incurred by
OPM.
By statute, Government and the employee or retiree share the cost
of health insurance, with the Federal Government contributing 72
percent of the weighted average premium of all plans but no more than
75 percent of any given plan's premium, with the exception of employees
of the United States Postal Service (USPS), whose
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share of the premium is collectively bargained and certain other
exempted agencies.
Title 5 U.S.C. 8903 specifies the types of health plans with which
OPM may contract for FEHB. Enrollees choose a health plan from a health
insurance carrier that offers one or more plans. There are currently
262 different health plan options to choose from. As a practical
matter, depending on where an enrollee resides, his or her choice of
plans is limited to about 15 different plans on average.
Individuals may enroll or change plans during the FEHB annual open
season, or through a Qualifying Life Event (QLE), such as marriage.
Plan offerings in terms of benefits and premiums may change during each
open season. Details for all FEHB plans are available on OPM's website
at https://www.opm.gov/healthcare-insurance/healthcare/plan-information/plans/.
Summary of Current Health Plan Options
Generally, health insurance carriers and their health plans fall
into two broad categories: Fee-for-service (FFS) plans (plans under 5
U.S.C. 8903(1), (2) and (3)) or health maintenance organizations (HMOs)
(plans under 5 U.S.C. 8903(4)). FFS plans are generally available
nationwide, and HMOs tend to be locally available.
FFS plans and HMOs are structured differently. Enrollees may base
their decision to join a FFS plan or an HMO based on a variety of
factors, such as whether they already have a preferred medical provider
and where they live. However, a key difference for enrollees is the
flexibility that FFS plans usually provide around the use of out-of-
network providers. FFS plans are more likely to allow access to out-of-
network providers, with increased out-of-pocket costs, than HMOs.
The FEHB Program typically offers about 19 FFS plans that are
available nationally across the Federal Government (although 4 are open
only to certain types of Federal employees). Many FFS plans have a
preferred provider organization (PPO) whereby medical providers have
contracted with the health plan to offer discounted charges. Enrollees
may choose providers outside of the PPO but will pay a larger share of
the cost of services from these providers. Some FFS plans only offer
in-network providers, except in emergencies.
Discussion of the Proposed Changes
To correct an asymmetry in the insurance market for Federal
employees and annuitants, this proposed regulation provides all Federal
Employees Health Benefits (FEHB) Program carriers the ability to offer
the same number and types of plan options. Currently, OPM regulations
at 5 CFR 890.201 on minimum standards for health benefits plans allows
5 U.S.C. 8903(1) and (2) to have two options and a high deductible
health plan, but plan types under 5 U.S.C. 8903(3) and (4) may have
three options or two options and a high deductible health plan creating
an asymmetry between the potential offerings of types of health
benefits plans. We are revising the regulations so all health benefits
plans under 5 U.S.C. 8903 have the language that includes three options
or two options and a high deductible health plan. This will give
enrollees additional options when considering which health plan is best
suited for them, for example, using a variety of variables such as
premium, co-pay, and deductible costs, provider networks, and referral
and pre-authorization policies. Since all health plans must compete
annually for enrollees, adding additional options could create an
incentive for plans to keep premiums as low as possible to attract
enrollees. This regulation fully aligns with the Administration's goal
of promoting affordable health plan choices.
Expected Impact of Proposed Changes
The FEHB Program currently contracts with 83 health plan carriers
which offer a total of 262 health plan options. These proposed changes
are projected to create two additional plan options in the FEHB
Program.
OPM expects that this regulatory change allowing an increase in the
number plan options will have a positive effect on the market dynamics
in the FEHB Program by potentially increasing competition between
health plans. This regulatory change will allow health plans under 5
U.S.C. 8903(1) and (2) to offer lower cost, higher quality options to
better serve FEHB Program enrollee interests.
It is difficult to anticipate potential changes in enrollment due
to this regulatory change because our regulations have previously
prohibited plans in these statutory categories from having three
options. However, we anticipate that a portion of enrollees will move
to lower cost, higher quality options because OPM will ensure that
additional options are distinct and meet enrollee interests and
enrollees will have access to adequate information to understand the
available plan options.
While this rule will allow another option for certain carriers, a
carrier is not mandated to offer a new option and this regulation does
not increase the number of insured individuals in the FEHB Program. If
a current enrollee enrolls in one of the new plan options they will be
disenrolled from their old one.
OPM does not believe that this regulation will have a large impact
on the broader health insurance market since FEHB generally constitutes
a smaller percentage of the overall health insurance carrier's book of
business. OPM also believes that employees and annuitants make their
health care decisions based on a variety of factors, including
networks, premiums, etc., so changes in plan enrollments will be
determined by individual choice. However, because OPM does not have
extensive data to determine the impact of this regulation, we are
seeking comments on the following:
1. How will the changes made by this regulation impact the broader
health insurance market?
2. How will the changes made by this regulation impact the
enrollment of annuitants compared to employees?
3. How will the regulation impact changes to enrollment in the FEHB
Program?
Executive Order Requirements
Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated a ``significant regulatory
action,'' under Executive Order 12866.
Paperwork Reduction Act Requirements
Notwithstanding any other provision of law, no person is required
to respond to, nor shall any person be subject to a penalty for failure
to comply with a collection of information subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid Office
of Management and Budget (OMB) Control Number.
This rule involves an OMB approved collection of information
subject to the PRA--OMB No. 3206-0160, Health Benefits Election Form.
The public reporting burden for this collection is
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estimated to average 30 minutes per response, including time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. The total burden hour estimate for this form
is 9,000 hours. The systems of record notice for this collection is:
OPM/Central 1 Civil Service Retirement and Insurance Records, available
at https://www.opm.gov/information-management/privacy-policy/sorn/opm-sorn-central-1-civil-service-retirement-and-insurance-records.pdf.
The FEHB Program currently has a total of 262 health plan options
for employees to choose from for their health benefits coverage.
Historically, about 18,000 of FEHB participants switch health care
plans in any given year. This regulation has the potential to add two
new enrollment codes representing new plan options and is not
anticipated to significantly change the burden associated with this
collection.
Send comments regarding the burden estimate or any other aspect of
this collection of information, including suggestions for reducing this
burden to [email protected]. The final rule will respond to any OMB
or public comments on the information collection requirements contained
in this proposal.
Regulatory Flexibility Act
I certify that these regulations will not have a significant
economic impact on a substantial number of small entities.
EO 13771: Reducing Regulation and Controlling Regulatory Costs
This proposed rule is expected to be an EO 13771 deregulatory
action as it addresses an asymmetry in the Federal Employees Health
Benefits (FEHB) Program market by allowing all carriers to offer three
plan options. Additional information can be found in the ``Expected
Impact of Proposed Changes'' section of the rule.
List of Subjects in 5 CFR Parts 890
Administration and general provisions; Health benefits plans;
Enrollment, temporary extension of coverage and conversion;
Contributions and withholdings; Transfers from retired FEHB Program;
Benefits in medically underserved areas; Benefits for former spouses;
Limit on inpatient hospital charges, physician charges, and FEHB
benefit payments; Administrative sanctions imposed against health care
providers; Temporary continuation of coverage; Benefits for United
States hostages in Iraq and Kuwait and United States hostages captured
in Lebanon; Department of Defense Federal Employees Health Benefits
Program demonstration project; Administrative practice and procedure,
employee benefit plans, Government employees; Reporting and
recordkeeping requirements, Retirement.
U.S. Office of Personnel Management.
Kathleen M. McGettigan,
Acting Director.
Accordingly, OPM is amending title 5, Code of Federal Regulations
as follows:
PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM
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1. The authority citation for part 890 continues to read as follows:
Authority: 5 U.S.C. 8913; Sec. 890.301 also issued under sec.
311 of Pub. L. 111-03, 123 Stat. 64; Sec. 890.111 also issued under
section 1622(b) of Pub. L. 104-106, 110 Stat. 521; Sec. 890.112 also
issued under section 1 of Pub. L. 110-279, 122 Stat. 2604; 5 U.S.C.
8913; Sec. 890.803 also issued under 50 U.S.C. 403p, 22 U.S.C. 4069c
and 4069c-1; subpart L also issued under sec. 599C of Pub. L. 101-
513, 104 Stat. 2064, as amended; Sec. 890.102 also issued under
sections 11202(f), 11232(e), 11246(b) and (c) of Pub. L. 105-33, 111
Stat. 251; and section 721 of Pub. L. 105-261, 112 Stat. 2061; Pub.
L. 111-148, as amended by Pub. L. 111-152.
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2. Amend Sec. 890.201 by revising (b)(3)(i) to read as follows:
Sec. 890.201 Minimum standards for health benefits plans.
* * * * *
(b) * * *
(3)(i) Have either more than three options, or more than two
options and a high deductible health plan (26 U.S.C. 223(c)(2)(A)) if
the plan is described under 5 U.S.C. 8903(1), (2), (3) or (4).
* * * * *
Sec. 890.201 [Amended]
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3. Amend Sec. 890.201 by removing paragraph (b)(3)(ii).
[FR Doc. 2017-27067 Filed 12-18-17; 8:45 am]
BILLING CODE 6325-63-P